Maha Regulator Dismisses BEST Plea For ‘Limited Open Access’

Maha Regulator Dismisses BEST Plea For ‘Limited Open Access’ CERC Allows Adani Subsidiary Compensation For 'Change of Law' Events

In an order published just before the weekend started last week, the Maharashtra Electricity Regulatory Commission (MERC) has  dismissed a petition by BEST, one of two Mumbai discoms, wherein BEST had requested for allowing limited Open Access in its area of supply and for determining and allowing Open Access charges and other fees and charges. Delays in open access regulations have been a common tactic by discoms to prevent migration. Mumbai is managed by three discoms, the municipality run BEST, Tata Power, and Adani Electricity.

BEST had based its contention on the risks to it from the movement of its consumers to the Tata Power Company, the other discom, and its consequent financial impact on BEST. Thus, its request to allow only ‘limited open access;, besides “to determine and allow the Open Access Charges including Wheeling Charges, Cross Subsidy Surcharge, Additional Surcharge and Additional Security Deposit under the MERC (Distribution Open Access) Regulations, 2016 for the period from FY 2020-21 to FY 2024-25”. It needs no guesses to realise that the intention was to make any such portability among its consumers a cost neutral or even counter productive affair, by adding on charges that would make the whole exercise irrelevant. Something that the commission has possibly considered too, besides the primacy of the end consumer.

The tussle between BEST and TPC has been an ongoing one since 2009, when the first BEST customer made the switchover to TPC, taking advantage of the switchover allowed for the first time then. For most BEST consumers, the switch was driven by slightly lower costs at TPC, besides more ‘dependable power’.

BEST itself has highlighted how open access made it even more attractive for its high value consumes to make the shift, with possible repurcussions for BEST and its remaining consumers.

Thus making it incumbent upon BEST to push for a regime that would allow it to charge it to allow a ‘fair’ cost from such customers. Or ‘limited’ open access, in other words.

Incidentally, As per Section 42(3) of the EA and Regulation 34 of the DOA Regulations, a Local Authority, such as BEST, is exempted from providing the mandatory OA. However, in the interest of its consumers, BEST claimed that it can allow OA on its network to a limited extent while retaining the status and concessions granted to it by the EA. This proposing the following charges for  its open access consumers moving to TPC. BEST proposed to determine the charges applicable to OA consumers based on the DOA

  • Wheeling Charge: As per regulations
  • Cross Subsidy Surcharge at Rs. 0.71/kWh to Rs. 2.01/kWh depending on HT, LT category of consumer.
  • Additional Surcharge: Not calculated yet
  • Additional Security Deposit for Wheeling: To be decided
  • Other Fees and Charges and / or others sum recoverable- OA charges equal to that of similar existing charges in the MSEDCL’s MYT Order
  • Regulatory Asset Charge- None for present, possibly in future.

The MERC, in its order pointed out that previous orders have made it clear that  a local authority (BEST in this case) which is engaged in the business of distribution of electricity is not obliged to provide such open access to a consumer on its network to receive the supply from a third party source from outside the area. In fact, it would have been in the interest of the Appellant and the consumers that the Appellant could have provided access to its network for supply by Tata Power Company. In that event, it would have avoided the capital expenditure on the additional network and at the same time provided return to the Appellant on its network costs.

The commission did note that Commission that there should not be any discrimination to rest of the consumers if only high-end consumers are permitted to avail the OA from BEST’s Distribution Network. BEST would be required to follow all the provisions of Act, OA Regulations and any orders that are applicable to OA consumers.

Hence, the order to dismiss BEST’s present plea, even though BEST claims it to be in the interest of the consumers. However, BEST can file a fresh petition, after giving due consideration to the other issues where it has not completed calculations yet and  refine its proposal which could then be considered legally and on merit of the
revised proposal.  CSS and other charges to be determined after conducting the due public consultation procedure.

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Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International